Grosz … 'Indifference is a catastrophe'. Photograph: Graeme Robertson for the Guardian

There's a lot of the literary in Stephen Grosz. You can tell from the chapter titles of his book, with their familiar fireside whiff of Aesop or Kipling: How Lovesickness Keeps Us From Love; How Anger Can Keep Us From Sadness. Often, too, his limpid, pared-down fables conclude with an observation so elegant and so penetrating that it is almost an aphorism: Better to have lost something than be something someone forgot; Closure is the false hope that we can deaden our living grief.

"All sorrows can be borne," the great Danish writer Karen Blixen once said, in a line Grosz cites in his book and that could well serve as its epigraph, "if you put them in a story, or tell a story about them." Grosz's business, though, is with the people who cannot tell the story of their sorrows – whose story takes them over to such an extent that, so to speak, it ends up telling them, generally with more or less unfortunate consequences. His job is helping them to tell their stories.

"The most important stories sometimes can't be talked about directly," he says. "People don't have the words. Maybe nobody ever helped them to talk about their experiences. They are out of touch with their feelings, trapped in some unhappiness or fear: frightened, anxious, in pain. But they may insist everything is fine. Their life – their boss, their partner, their kids – needs them to be neurotic, or depressed, whatever they are. They want change, but as one patient once said to me, 'not if it means changing'."

Psychoanalysis, Grosz says, is "about the thing beneath notice: the daydream, the nightmare. Often it's actually about saying: there is a meaning, this doesn't come from nowhere." He tells a story (How Paranoia Can Relieve Suffering and Prevent a Catastrophe) to illustrate his point: a single woman, returning home at night, is convinced that when she turns her key in the door her apartment will blow up: terrorists have set a bomb to kill her. The apartment, she tells Grosz on the couch in his Hampstead consulting room, is cold and empty. The exact opposite of how it was to come home when she was small, to her mother and grandmother waiting with her tea.

"The bomb fantasy frightened her," says Grosz. "But it stopped her from feeling so alone. It's better to think someone is out to hurt you than that no one cares about you. Indifference is a catastrophe, and her paranoia was shielding her from it."

So a great deal of his work, he says, "is about people coming to me with the story they cannot tell, and us working out how to tell it. They can be intelligent, articulate – but they don't have the words. At some level, they become possessed by their story. This book is an anthology of those worked-out stories."

The Examined Life is Grosz's first book. It is already something of a literary sensation, going to auction, selling into more than a dozen major markets before publication, getting picked as BBC Radio 4's Book of the Week (this week). He wrote it because the time felt right: "I'm 60 now, an older father – my kids are 10 and seven – and my own mother died when she was 64. I wanted to put down the most important lessons I had learned, as simply and clearly as possible, for people who may never have an analysis."

That will, of course, be the vast majority, of course: while the Institute of Psychoanalysis runs a low-fee scheme and most practitioners tend to accept one or two pro bono cases, pure psychoanalysis here (unlike, for example, Germany) is not usually an NHS option. A shrink, in Britain, remains something of a luxury, though none the less busy for that: between eight and 10 patients a day take their place on Grosz's couch. That's maybe 50,000 hours of conversation so far; more than enough to keep him in stories.

So what do Grosz's 30-odd stories – of deceived wives, out-of-control children, lonely fathers, frightened daughters, hypocritical husbands, congenital liars, lovesick singletons, successful businessmen who inexplicably lose things – actually tell? They explain, for example, that people often use boredom as a form of aggression; that praising children too much can make them lazy later; that the present is the only time that's real – "The past is alive in the present ... The future is an idea in our mind now" – and that we are capable of telling ourselves all manner of lies in order not to face a truth.

Two main themes emerge. "The first," Grosz says, "is that change involves loss. In fact, all change involves loss, and yet life itself is change – we are always giving up something for something else. And the point is that we lose ourselves when we try to deny those changes, when we deny that life entails loss."

For Grosz, Dickens's Scrooge – whose story he relates in a chapter titled How Lovesickness Keeps Us from Love – is "actually a great story of psychological transformation. We read it as a Christmas tale, but what Scrooge is doing is denying his losses: the death of his mother, his sister, the loss of his fiancee. Instead, he counts his money, seeing only gains, not losses. The three ghosts haunt Scrooge with his unhappy past, show him a present in which the long-suffering Cratchits endure their losses but stay big-hearted, and his own inevitably bleak future. What the ghosts do is gradually undo Scrooge's delusion that you can live a life without loss." The ghosts play, in fact, the part of a psychoanalyst.

Thereafter we mend ourselves, Grosz believes, "by repairing our relationship with the lost, by acknowledging that these were losses. We can find ourselves by facing truths about our lives and about these losses, by facing the truth about how our relationships with people really are, not how we'd like them to be." In other words, by truly telling our stories.

Grosz – tall, kindly, courteous – was born in 1952 not far from Chicago, the son of an aspirational grocery store keeper from eastern Europe and an American-born painter. By 17, he knew where his interests lay: RD Laing's The Divided Self, Erving Goffman's The Presentation of Self in Everyday Life, and above all Freud's The Interpretation of Dreams "just knocked me out". The latter, Grosz says, "enthralled me: this idea that we could live our lives and not know our feelings; have desires we don't know about. That we could be disconnected from our selves and not know who we are. Amazing."

Studying psychology and politics at the University of California, Berkeley, he started applying analysis to try to understand politics – and looking at literature to understand psychology. The pivotal moment, he says, was two short stories: Bartleby the Scrivener, Melville's extraordinary tale of the copyist "who preferred not to", and Conrad's stowaway story The Secret Sharer: "Both seemed to me precisely about the psychoanalytic idea of doubling. They made great emotional sense to me."

The key as he sees it, in writing as in psychoanalysis, is that quest for truth: "My friend [the poet] Wendy Cope says, 'Make it more truthful.' Is this exactly what the patient said? Is that exactly how it was? You have to dig down really deep to make it good – but you're also after lightness. You don't want to write about the Oedipus complex, you want to take weight out of the story. That, for me, is what the great writers do."

He has found inspiration in the short stories of writers such as Raymond Carver, John Cheever, Andre Dubus, Chekhov, Kafka, Thomas Mann. "Down the years, psychoanalysis has become longer and more complex," he says. "But when I taught a course on writing case histories, I discovered that what I felt was true had nothing to do with length. What counted was telling the story so well the reader had the same experience as the writer. I'm not convinced by statistics or page count, I'm convinced by someone who's been there, got really close, seen what they've seen, and can put it across in writing."

Grosz's hope, then, is that his own delicate and utterly compelling casebook may demonstrate "a certain disposition towards the world. A way to think about things. The individual stories hold their meanings, I trust, but the book as a whole has ... a certain way of looking at things. That can be a start. Solutions may come later."

The Examined Life by Stephen Grosz is published by Chatto & Windus at £14.99. To order a copy for £11.99 plus free UK p&p go to guardianbookshop.co.uk